BNSF Railway (BRK-B) operates in the Western United States and competes primarily with Union Pacific (UNP). Its total railcars for the week ended March 25, 2017, rose 19.4% YoY (year-over-year) to ~98,000 units, compared to more than 82,000 units in the corresponding week of 2016.
Carloads other than coal and coke rose 13.9% YoY to ~64,000 units in the week ended March 25, 2017. The rise in BNSF Railway’s overall carloads was much higher than the percentage rise reported by US railroads overall.
Why coal matters to BNSF
BNSF Railway’s coal and coke railcars rose 31.2% YoY in the week ended March 25, 2017, which was almost 50.0% more than the rise reported by rival UNP. In 2015, coal transportation contributed nearly 22.0% of freight revenue for Berkshire Hathaway’s BNSF, the largest US Class I railroad company.
About 90.0% of that coal originates from the Powder River Basin in Wyoming and Montana. Major coal producers operating in the area include Alpha Natural Resources (ANR) and Peabody Energy (BTU). Environmental concerns and competition from natural gas (UGAZ) are hampering incremental coal shipment prospects for coal producers (ARLP) in 2017.
The commodities that rose in the week ended March 25, 2017, were as follows:
- sand and gravel
- stone, clay, and glass
- motor vehicles
The commodities that fell were as follows:
- waste and scrap
- forest products
- lumber and wood
In the next part of this series, let’s look at BNSF Railway’s intermodal traffic.